Indonesian thermal coal portside prices range-bound w-o-w amid sufficient inventories

Indonesian thermal coal portside prices remained range-bound this week. The coal market is experiencing stability in prices due to sufficient stockpiles in China and weak demand from India on the back of regional disruptions and lower inquiries because of the monsoons.

Notably, prices of the 3400 GAR at Navlakhi Port were stable at INR 5,200/tonne (t). Prices of the 4200 GAR at Kandla stood at INR 6,300/t ex-port. Meanwhile, prices of the 5000 GAR at both Vizag and Kandla ports also remained stable this week.

Indonesian indexed prices of high-CV (5800 GAR) coal were recorded at $92.68/t, inching up by $0.23/t. Indonesian mid-CV prices (4200 GAR) fell by $0.28/t to $52.16/t while the low-CV (3400 GAR) inched down by $0.10/t to $32.49/t. Prices are on FOB basis.

In China, despite ongoing heat waves in the eastern region, ample coal stockpiles at power plants are limiting immediate demand. Power plants reportedly have around 15 days of coal burn available. This surplus is allowing Chinese buyers to negotiate hard on spot deals and pull down prices, especially of low-calorific value (CV) cargoes.

Indian power plants too have sufficient stock available. However, some coal-based plants are operating with stocks fallen to critically low levels due to supply disruptions from domestic mines amid continued rains. The ongoing monsoon has slowed down construction projects and industrial activity, resulting in weak demand for coal. Coastal power plants, which rely on imported coal, are seeking low-CV cargoes. Some Indian buyers are starting to position for the post-monsoon period, but overall industrial demand is not expected to increase significantly before mid-September.

On the supply side, miners in Indonesia's East Kalimantan are facing loading issues due to low water levels, causing shipment delays. Despite this, the supply constraints are not significantly supporting prices given the overall tepid demand.